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Text Size
Jun.09
8:53 PM ET
Tuesday, 9 Jun 2009
Are Markets on the Right Track?

Three words have been so prevalent in virtually all of journalism over the past two days that investors might feel they are stuck in Bill Murray’s Groundhog Day. Only instead of repeating the same 24 hours over and over, they are forced to hear the same sound byte or read the same headline minute after minute: [insert bad news here] could “derail the economy.”

You name it – higher gas prices, weakened consumers, prime foreclosures, increasing bond yields, closing General Motors [GMGMQ  Loading...      ()   ] and Chrysler plants – all seem to portend doom for the U.S. economy. The New York Times, Wall Street Journal and even the occasionally chipper USA Today have run stories, describing these happenings as inherently negative.

Ever the contrarian, Cramer dared to see things from a different angle. Those higher gas prices could signal rising demand after a decline in usage. Weakened consumers unable to access credit might indicate they are instead driving the economy without acquiring debt. And prime borrowers’ homes hold a lot of equity, so the lending banks wouldn’t mind getting them back. Especially in Hudson City Bancorp’s [HCBK  Loading...      ()   ] case, where its New York/New Jersey area homes are now worth more than their mortgages.

This brings us back to a question Cramer had raised on May 29: Is the media going negative to keep readers reading and viewers watching? If so, they are distorting the facts and doing investors a disservice.

Cramer wants the press to be skeptical about both positive and negative news – whether it be rising interest rates, banks repaying TARP loans or the buying of once-toxic mortgage bonds – instead of sour on just the former. While there are plenty of things that could derail the economy, there are also many circumstances that could in fact “rail” it. Think of stocks as the tracks, Cramer said, and they have been trending higher.

So maybe the market is the little engine that could. That’s more than possible considering the Dow’s rally on Tuesday back from its lows to close just one point down and the Nasdaq’s 17-point climb. Apparently, despite all the talk about derailment, something is keeping us on track. Cramer just wishes the media would report that.

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